Tuesday, 21 February 2017

Permanent Employment v Contracting: How the figures stack up

In my latest
learning tree newsletter, I discussed analysing some of the salary survey data
that the good folks over at BrentOzar.com collected and made available back in
January 2017. The data is very interesting and in my first post on this topic over the learning Tree blog,
we looked at using some simple SQL statements to query and analyse the data.

In this post
we will take our analysis a little deeper and look at how the survey breakdown
by country. We will also be particularly interested in the breakdown between
permanent employees and contractors/freelancers, starting by looking at the
breakdown by country.

In the first
query, here we will look at the average (mean) salary grouped by country (we’ll
use the Group By clause and group on the Country column). We'll also use the
RANK function to allocate a rank (or position in a list – think of a golf
tournament or leader board or league table), to the average salary of each
country; show where in the world pays the best for a data professional and
where the pay is not as high.

I'll use the
count (*) aggregate function to look at the number of replies from each country.
This is quite important to see how good a representation the mean salary is for
country.

To get this breakdown we need to introduce the
Group By clause. With a Group By clause we get a result of the aggregate (a
calculation) for each group specified, in our case country.

So in the next example for each country we
will get a count of respondents, a mean or average salary of each country.

SELECT Country

,RANK()over (orderbyAVG(SalaryUSD)desc)asRank

,AVG(SalaryUSD)as AVGCOuntrySal

,COUNT(*)as NumberOfReplies

FROM [dbo].[SalarySurvey]

GROUPBY Country

-->

orderby AVGCOuntrySal desc

We can see
the UK comes in 20th place from a total of 66 countries. I was a little shocked initially to see that,
but then I thought about the data some more. There can be a number of reasons
for this relatively low position of the UK, as at the time the survey was taken;
value of the dollar to the pound was not good if you’re paid in British Pounds.
£1 would buy you $1.23. I have seen this
as high as £1 buying $2.12 over the last 10 years. So we have to factor in the
exchange rate here affecting the non-US responses.

At the time
the survey was taken, Switzerland has the highest average and has 18 respondents.
Having visited Switzerland I know it’s an expensive place to live, the United
States comes in third and has the most respondents. It’s not possible with the
data in its current form to break that down further to state and region. The US
is a big place and I suspect there will be discrepancies between the different
states and regions. I’m speculating here but I suspect the salary of DBA
Sheboygan Wisconsin will be different from that of DBA New York City, but we
can’t look at that with the data in its present form.

What I’m
interested in looking at in this post is the difference between Permeant and
Freelance in the UK. I'm going to take
the UK people who replied to the survey and stated their role as freelancer to
be a consultant/contractor. That is a third party, running their own business
and supplying services to businesses. They are not employed by the company but
providing services for a fee. So I suspect to see quite a contrast in these
values of contractors compared to permanent company employees. It comes down to
the risk and reward quandary. Generally speaking, the higher the risk the
higher the reward.

One of the
questions that I get asked a lot when delivering training especially when
people get to know me and how my business works is, do you think contracting
would be for me? My usual reply is”I
can’t answer that for you.” However, I’ll happily talk to you about the
advantages and disadvantages of running your own business, which is what
contracting is all about. There is much
more to consider than just money but if that is a factor for you, it may
influence your decision. Knowing the difference between permanent employment, contracting
and take home pay, may or may not affect your decision making…So let’s look at
the figures.

$58,480
coverts to roughly £47000 so there seems some parity and similarity in the results of the two surveys.

Contractors/freelances
according to the survey can earn considerably more, but this needs to be balanced
out and considered in full context. There will be other things included for a full-time employee; that are
not included in the salary.

To name just a few:

Pension

Sick pay

Maternity/paternity
leave

Holiday pay

The list
goes on but these are things I point out to people when they see the initial
figures above and immediately think they will be better off contracting. They might earn a little more but there will be extras included in a full time role that are contractors do not get. Remember as your own boss you will need to make sure you have provisions for these from your income. A permanent employee would not.

If you have
a need for a contractor or permanent member of staff, here at gethynellis.com
we can help you. We have an extensive network of IT professional’s that we can
call on to help fill a vacancy if you need it. As we have technical skills
ourselves, letting us do an initial vet of possible candidates can mean you
only get appropriately qualified people in front of you for an interview. Check out the IT recruitment page of the website

If you are
looking for a new role or want advice on your job search do feel free to reach
out to us. On both twitter and LinkedIn.